Coinbase is Highly Undervalued if Crypto is Here to Stay, John Deaton Asserts

Coinbase Global Inc. (NASDAQ: COIN), a leading cryptocurrency exchange with cash reserves exceeding $5.32 billion as of Q1 2023, has witnessed a remarkable rally in its stock market, surging over 72 percent year-to-date (YTD) to trade at approximately $61.21 on Thursday.

This surge in first-quarter profits can primarily be attributed to the increasing market share and the underlying value of Bitcoin and Ethereum. However, the bullish outlook that prevailed in the crypto market during the first quarter seems to be slowly fading away in the second quarter.

Undervaluation Claims Strengthened

Pro-XRP lawyer John E. Deaton has voiced his opinion on Coinbase’s valuation, stating that it is highly undervalued, assuming that the cryptocurrency market is here to stay, as many analysts purport. Deaton’s statement comes in response to a similar notion expressed by Matt Hougan, the Chief Investment Officer of Bitwise, who highlighted Coinbase as one of the most undervalued companies in the crypto market.

Regulatory Hurdles

Coinbase is currently grappling with regulatory scrutiny in the United States as it expands its business into international markets. Earlier this year, the Securities and Exchange Commission (SEC) served Coinbase with a Wells Notice, alleging the issuance of unregistered securities through its listing and other services. However, the SEC faced criticism for approving Coinbase to go public with the same business model and subsequently charging it for non-compliance.

Plans For International Expansion

In response, Coinbase has recently intensified its international efforts with the introduction of an international crypto exchange. Despite its lower market capitalization in comparison to Dogecoin (DOGE), the leading meme coin, Coinbase faces fierce competition from Binance and the burgeoning decentralized exchanges industry. 

Despite facing considerable hostility from the United States government, Binance holds significant influence in various jurisdictions, including Europe, Asia, and Africa.